Research: How Paid Search Did in 2012 Retail Season

Adobe has announced some interesting paid search research on the 2012 retail season. And there are some key takeaways here for digital marketers.

Paid Search Trends in 2012

Digital marketers have a number of tools at their disposal, one of the big ones is paid search. We know it's a big one because it was up over 13% over last year. Note this is based on retail spend which tends to be pretty high during the holiday season.

Google gets the bulk of this paid search money as you can see from the chart below:

Adobe points to two reasons for this increase in spend, the increased popularity of mobile shopping and the introduction of Google's new paid model -- Product Listing Ads (PLAs). You might remember that Google began with a free option called Google Shopping, but converted it to a paid model back in October.

While Google has allowed had a higher share of the paid search market, the reason their numbers went up in 2012 was due to the PLAs. Also interesting to note that Adobe found that Google's PLAs share is almost equal to that of Bing's paid search option.

PLA ads seemed to be very popular during the peak of the holiday season and then they dropped a bit. PLA ads show the price of the product, something text ads do not, so the assumption is that they were popular with bargain conscious shoppers (and we are all bargain conscious at that time of the year more than any). What this means overall is that although they have a higher click through rate (CTR) compared to Google text ads, their average order value (AOV) is actually lower than the text ads by 12%. Finally, ROI and CPCs for PLAs are actually in line with those of text ads

It's not surprising to find out that mobile shopping on either the smartphone or tablet are gaining dramatically on the desktop. What Adobe's found, and other research confirms, is that shopping tend to use the desktop the most between 9-5 on Monday-Friday and spend their evenings and weekends (and away from the office time) on their smartphones and tablets. This has equated to mobile being responsible for 1 in 6 clicks, representing 20% of all spend and impressions.

What You Need to Consider When Working with Paid Search

Adobe's Director of Business Analysis for Ad Solutions, Sid Shah, took me through the figures above for paid search. Formerly the lead analyst for Efficient Frontier (which Adobe acquired last year), Shah has some keen insights on the advertising market.

I'm not sure how you think about advertising across channels, but hopefully you aren't thinking it's the same approach. Why, when and how you choose to advertise, whether it's paid search or some other method is different because consumers use their devices at different times and in different ways.

Shah explained that from a paid search perspective there some general rules you can follow. This is that desktops are used during the weekdays and tablets and smartphones the rest of the time. However, tablets and mobile devices are not used the same.

Mobile devices tend to be used in two ways:

Researched based searching

Location-based searching

So your creative messaging should be different, because the consumer is in a different place in the buying process. It's interesting to point out here that many organizations still don't have mobile optimized websites, which means they are missing out on potential sales. Mobile may not be the final click in the buying process, but if they are the first, and consumers can't find your product, then you aren't going to get that sale anyway are you?

In the case of tablets, there are a number of ways to search for products/services, so you need to take them all into consideration when you are identifying your approach to advertising.

What all this means for paid search is that when you are creating your search campaigns, consider doing device level targeting, especially for higher volume keywords. Consider time, place and context and your paid search campaigns should perform much better than a one-size fits all approach.

Shah predicts that the numbers presented above will increase for the 2013 holiday season. It will be wait and see, but I suspect he has his number right.

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